Chapter 13 Bankruptcy Debt Limits Change in 2013

Filing Chapter 13 bankruptcy will soon be an option for people with larger debts. On April 1, 2013 the law will adjust to allow people with unsecured debts of up to $383,175 and secured debts of up to $1,149,525 to file Chapter 13.
Chapter 13 Not For Everyone
Chapter 13 is not for everyone.  By design, not everyone meets the rules for filing a chapter 13 bankruptcy. Chapter 13 bankruptcy law is designed to be limited to simpler, straightforward debt reorganization. For that reason only people and married couples may file Chapter 13. Your corporation or limited liability company are not allowed to file Chapter 13. The Chapter 13 debt limits are another method of excluding more complex cases from Chapter 13.
Option for More People
Many more people who want to take advantage of the benefits of a chapter 13 bankruptcy and get caught up on back house payments, get rid of second mortgages, or protect property that would be lost in Chapter 7 will soon meet the rules and be allowed to file Chapter 13.
Debt Limits Increase April 1, 2013
Every three years the debt limits for chapter 13 change. These revisions are based on changes in the consumer price index. Effective 04/01/2013 the new limits for unsecured debt are $383,175 and the limit for secured debt is $1,149,525.
Debt Limits Subject to Dispute
Anyone who has more than than these limits may not file a chapter 13 bankruptcy. However, as with anything in the law, it’s not always clear whether a particular debt should be counted toward these limits.
The bankruptcy code provides that a debt be non-contingent and liquidated to count toward the unsecured debt limit. Plenty of legal battles have been fought over whether a particular debt meets this rule. Before making a hasty judgment that you do not qualify for chapter 13 be sure to talk to an experienced Arizona bankruptcy lawyer.

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